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                                                                 EXHIBIT 10.25.2

                    AMENDMENT NO. 2 TO CONTRIBUTION AGREEMENT


         THIS AMENDMENT NO. 2 TO CONTRIBUTION AGREEMENT ("Amendment") is entered
into as of the 20th day of May, 2004 (the "Effective Date"), by and between
Hanover Capital Mortgage Holdings, Inc., a Maryland corporation ("HCHI"), and
John A. Burchett ("Burchett"), Joyce S. Mizerak ("Mizerak"), George J. Ostendorf
("Ostendorf") and Irma N. Tavares ("Tavares"). Burchett, Mizerak, Ostendorf and
Tavares are collectively referred to as the "Principals."

                                    RECITALS

         WHEREAS, HCHI and the Principals entered into that certain Contribution
Agreement dated as of September 19, 1997 (the "Contribution Agreement") which
provides for the transfer of shares of HCHI common stock to the Principals and
forgiveness of certain indebtedness of the Principals to HCHI upon the
satisfaction of certain conditions related to the financial performance of HCHI
measured as of specified "earn-out measuring dates."

         WHEREAS, HCHI and the Principals entered into that certain Amendment
No. 1 to the Contribution Agreement dated as of July 1, 2002 ("Amendment No. 1")
which revised certain provisions of the Contribution Agreement to modify the
dates and the conditions that must be satisfied thereon in order for the
transfer of HCHI shares and forgiveness of indebtedness to occur for the
transfer of shares of HCHI common stock to the Principals and forgiveness of
certain indebtedness of the Principals to HCHI upon the satisfaction of certain
conditions related to the financial performance of HCHI measured as of specified
"earn-out measuring dates."

         WHEREAS, Section 6.1 of the Contribution Agreement provides that such
agreement may be amended by a written agreement signed by the parties thereto.

         WHEREAS, HCHI and the Principals each have determined that it is
desirable and in their best interests to amend the Contribution Agreement to
modify the earn-out provisions to correct and clarify the calculation of the
earn-out as set forth below.

                                    AMENDMENT

         In consideration of the mutual promises and covenants contained in this
Amendment and those certain amended and restated employment agreements between
HCHI and the Principals entered into on even date herewith, HCHI and the
Principals, intending to be legally bound, agree as follows effective as of the
Effective Date:

         1.       Section 2.2.3 of the Contribution Agreement is deleted in its
entirety and replaced with the following:


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                  2.2.3 Earn-Out. The parties hereto acknowledge that the value
                  of the HCP Preferred is not determinable as of the Closing
                  with absolute certainty and was arrived at based upon
                  discussions between the Principals and the underwriters of
                  HCHI's initial underwritten public offering. To account for
                  the possibility that the HCP Preferred may have a value that
                  is greater than the value of the HCHI Common to be delivered
                  to the Principals at the Closing, the Principals shall be
                  entitled to receive the Earn-Out Shares, and to have the
                  outstanding balances of the loans made to them by HCHI
                  pursuant to Section 2.2.2 and their Loan Agreements forgiven,
                  as provided, and subject to the conditions set forth, in this
                  Section 2.2.3.

                           (i) If the Total Return per Unit as of any Earn-Out
                  Measuring Date equals at least 15% annualized return on the
                  Base Stock Price through such Earn-Out Measuring Date, HCHI
                  shall (A) issue to each Principal his or her Pro Rata Portion
                  of the lesser of (1) one-third (1/3) of the total number of
                  Earn-Out Shares or (2) the number of Earn-Out Shares that have
                  not theretofore been issued pursuant to this Section 2.2.3,
                  and (B) forgive, and discharge such Principal from liability
                  for, an amount of indebtedness of such Principal to HCHI under
                  such Principal's Loan Agreement equal to one-third (1/3) of
                  the principal amount loaned by HCHI to such Principal pursuant
                  to such Loan Agreement.

                           (ii) If the Total Return per Unit as of any Earn-Out
                  Measuring Date is equal to or greater than $9.036 (the Total
                  Return per Unit equal to 15% annualized return of the Base
                  Stock Price compounded for five years), HCHI shall (A) issue
                  to each Principal his or her Pro Rata Portion of the number of
                  Earn-Out Shares that have not theretofore been issued pursuant
                  to this Section 2.2.3 and (B) forgive, and discharge such
                  Principal from liability for, an amount of indebtedness of
                  such Principal to HCHI under such Principal's Loan Agreement
                  equal to the principal amount loaned by HCHI to such Principal
                  pursuant to such Loan Agreement.

         7.       All other provisions of the Contribution Agreement as amended
by Amendment No. 1 remain unchanged.

         8.       This Amendment may be executed in one or more counterparts,
each of which shall be deemed to be an original, but all of which shall be one
and the same document.



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                           [Signature page to follow]


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The parties hereto have caused this Amendment to be executed as of the date
first written above.

                              HANOVER CAPITAL MORTGAGE HOLDINGS, INC.


                              By: /s/ John A. Burchett
                                  ----------------------------------------
                              Name:  JOHN A. BURCHETT
                              Its:   Chief Executive Officer And President

                               /s/ John A. Burchett
                              --------------------------------------------
                              JOHN A. BURCHETT

                               /s/ Joyce S. Mizerak
                              --------------------------------------------
                              JOYCE S. MIZERAK

                               /s/ George J. Ostendorf
                              --------------------------------------------
                              GEORGE J. OSTENDORF

                               /s/ Irma N. Tavares
                              --------------------------------------------
                              IRMA N. TAVARES